Sunday, October 05, 2008

What Can We Nonprofits Do In This Uncertain Economy?

Without a doubt the way a nonprofit best survives a tough economy is to have already worked out and have ready an effective, viable, and all-encompassing organizational stressed-budget contingency plan to deal with financial crises; such as our difficult economy today.

I know, though, if we think about your operations a year or two years ago, that it would not have been easy to prepare or operate on foresight when expenses mounted 'today'. Investments in contingency plans or tomorrow, for some organizations are just too expensive (in particular, for small or start up nonprofits).

In tough economies we all need to save more, spend less, bring in more income that we have been. For some specific suggestions from other nonprofit leaders detailing how to survive these times read my post, "A Few Excellent Suggestions For Nonprofits To Survive These Uncertain Economic Times"; "Your Nonprofit Needs Money During This Economic Pinch? Read On..."; "Want to Spend Less on Your Non Profit's Fundraising? Here's How...". [If you'd like to know more or if you're curious about other aspects of fundraising, grant writing, nonprofit operations, or management search for the term by placing it in the box in the upper left hand side of this web page and then click the "Search Blog" button to the box's right.]

But, especially being nonprofits, even in crises or tough economies we must keep the mission of our organizations front and center, in mind, each step of the way. The people who volunteer or work for your nonprofit are not what is the most important - what is crucial to each and every nonprofit is your nonprofit's mission statement and the need your organization meets in the community (or the work that the organization does to serve your mission statement). The mission statement is the nonprofit's reason for existence; it differentiates your organization from all others, even those working in the same cause or issue; it guides or should guide each and every leadership decision made for the organization; it is why and how your organization received its official 501(c)... designation from the federal government to raise money; it is why your organization is given the benefit of tax free income ala the federal government; and it is the key that your organization's leadership uses to focus, clarify, and hone down what the organization does (e.g. new programs), how the agency does it, and for whom. All decision making must be viewed through the lens of the mission.

On Friday Congress passed a Wall Street bailout bill and the President indicates that he will sign it on Monday. Everyone in Congress who has spoken before the press, including the President himself, have said and reiterated that we just don't know what will happen next. The bailout will be used to strengthen weak markets so, hopefully, banks will begin to issue loans again to those who truly and really qualify for them. Once the economy's machinery moves again - the economy should regain strength and then grow.

So, in a way, your organization is being given an opportunity. Do you enjoy a good challenge? This economy and what may be coming is exactly where your organization is and what it will face next. Rise to the challenge this presents. Plan. If your organization is wildly making cuts to the fiscal budget, in reaction, or if your organization is attempting to raise money from a brand new fundraising event (on average it, takes three to five contiguous years of holding the same event before it breaks even and then begins to make money for your organization) - the nonprofit is grasping desperately at straws. Instead of putting energy where resources will just get used up and may not pay returns, yet; learn modern nonprofit best practices and operations and figure out how best to fundraise tomorrow in a planned out less expensive way; implement more effective operations and planning; sit down with key leaders and create a contingency plan; and instead of freaking out and reacting plan how your organization will save (even just a bit each month), and where you can lessen costs (e.g. buying in bulk, collaborating with a similar organization in providing programs to share expenses, shopping office supplies and buy where you truly pay less, talk with any major donor and ask if they can pay for any one of your larger expense for the year, utilize volunteers and train them well to be able to work special events or even pitch in with office administration, etc.).

Do not put your nonprofit in a position where it's left to react. Learn. If you don't know professional, modern, nonprofit best practices it's OK. What's not OK is ignoring that you are a novice or not familiar with what to do for the organization in certain situations. Learn. The nonprofit sector is no less a professional business sector than the technology sector, the retail sector, or the service industry. There are very specialized skills and knowledge necessary to run a strong, effective, and growing nonprofit. So, learn. Also, turn to your organization's community. These times are when you need to ask your nonprofit's community for a bit more. Ask donors for a bit more, ask volunteers what more they may be able to provide, locate a few more sponsors or in kind donors than your operations raised last year, talk with your major donors and share the true situation and ask what they may be able to do to help, pull your organization's leadership together and plan.

Where can you learn? Read my posts: "Places, Resources, and Ways to Learn Everything From Fundraising To Other Nonprofit Operations (Some Are Free)..." and "Some Free Resources..." for good suggestions that are standards in the nonprofit sector.

3 comments: said...

Thanks for the referrals back to the old posts. They were from before I was following your writing and I probably would have forever missed them.

Amy Sample Ward said...

There is a discussion on this in TechSoup's forum as well:

Thanks for sharing!

Arlene M. Spencer said...

Amy, Thank you for sharing! Arlene